Reassessment Notice After 10 Years Not Valid Under Sec. 150 | HC

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reassessment notice after 10 years Section 150

Case Details: Ltimindtree Ltd. vs. Joint Commissioner of Income-tax (OSD) - [2025] 177 taxmann.com 603 (Karnataka)

Judiciary and Counsel Details

  • M. Nagaprasanna , J.
  • K.K. Chythanya , Sr Adv., S. Sharath & Tata Krishna , Advs. for the Petitioner
  • Ravi Raj Y.V. , Adv. for the Respondent

Facts of the Case

The Transfer Pricing Officer issued an order under Section 92CA in the name of ‘A’, a company that existed prior to the merger with the present petitioner. The Assessing Officer then passed an order under Section 143(3) with respect to Section 144C again in the name of the merged company ‘A’. The petitioner raised this issue before the Tribunal, seeking quashing of the final assessment order passed under Section 143(3) read with Section 144C.
The Tribunal quashed the order reserving liberty to the revenue to take action in accordance with law. Pursuant to the said order, a notice was issued under Section 148, read with Section 150, proposing to reopen the petitioner’s assessment for the assessment year 2008-09. The petitioner objected to this before the Tribunal, contending that the Tribunal had only reserved liberty for the revenue and did not issue any direction to reopen the assessment. The Karnataka High Court then heard the matter.

High Court Held

The High Court held that section 150 enables the revenue to reopen an assessment pursuant to an order in appeal, but on twin conditions, i.e., to give effect to any finding or direction. The ‘twin conditions’ are to give effect to any finding or direction. The statutory power can be deviated from only on the aforesaid twin conditions.
The revenue would force the proceedings open by brandishing section 150, yet the law is clear. Section 150 is not a passport to wander beyond limitation at will. It is a narrow and guarded doorway that opens only upon a finding or direction by an appellate or revisional authority necessitating such reopening. A direction cannot be termed as a casual suggestion; it is a mandate, a command that brooks no discretion. Likewise, a finding is no passing observation; it is the very conclusion, without which an appellate decision cannot stand. In the instant case, the Tribunal’s words – ‘may proceed in accordance with law’- are but an echo of the statute itself, not an enlargement of power.
Therefore, section 149 would undoubtedly kick in unless the twin conditions are satisfied. The satisfaction of the twin conditions and their interpretation do not require a lengthy discussion or a deep dive into the matter by this Court. Since the reopening of the assessment was for the assessment year 2008-09 and the notice was issued in the year 2019, since 10 years had elapsed, it was barred by the time limit prescribed under section 149(1)(a) or (b).

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied